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Potential downtown projects on the docket for Oregon City

Pending sales of city-owned land to developers have fallen through before, including three times at the Main/12th street intersection

Due to a 90-day due-diligence period on the city's Municipal Parking Lot deal, the potential Main Street hotel developer has until November to pull out of the project.

If he agrees to take on the project, the developer will have another 300 days to get all of the land-use approvals to build the hotel and parking structure. The project is supposed to be complete in two years using the state's prevailing wages for public projects, according to the terms of the agreement.

Pending sales of city-owned land to developers have fallen through before, including three times at the Main/12th street intersection, which the city has had on the market for years.

For example, Greg Hoff, the owner of Mattress Warehouse USA,

to occupy part of a newly constructed three-story mixed-use building at a city-owned vacant lot next to the KFC Restaurant. But Hoff canceled his plans during an extended due-diligence period when he realized what would be involved in the project.

"It's a complex site because of really old infrastructure," said Eric Underwood, the city's economic development director.

In a setup that would have only been possible prior to city codes being established in the 20th century, a storm line runs through the property diagonally and heads to a manhole in the building across the street, Isa's Auto Repair. There's also a sewer line on the west side of the property that might make it difficult for McLoughlin Boulevard traffic to access the new building.

"There could be a bridge that would fold up if the city needs to access the sewer line," Underwood said. "We haven't had a developer at the 12th Street property who's been willing to go in and figure out how deep the lines go."

A group of Portland State University architecture students are currently working on creating a potential design that would allow a developer to profit from a building with a mix of commercial and river-view residential uses there. Underwood said that the city is hoping that the design could result in the city issuing a request for proposals to construct such a building.

Another city-owned vacant lot between the McDonald's Restaurant and Clackamette Park was taken off the market after getting some interest from developers. Underwood said that a couple of city commissioners wanted to do further analysis prior to considering a sale of the 2 acres on the floodplain. There's been some concern about impeding the view of the river from McLoughlin Boulevard, Underwood said, along with using the site for a potential shuttle-bus parking area to Willamette Falls.

A vacant site owned by the city's Urban Renewal Commission at 10th and Main streets is also seeing some action with a pending $110,000 June 21 sale to Willamette Stone LLC, which has done several other projects on constrained sites throughout the region. Willamette Stone will be in its due-diligence period on the quarter-acre site through the autumn, but it has proposed three floors of 33 residential units on top of ground-floor retail. Because of the vertical housing, the developer would be eligible for a 60 percent tax break on its Oregon City property taxes for 10 years.

"If that incentive weren't in place, it may be some years before that property were back on the tax rolls," Underwood said.

City officials have contacted Union Pacific and the state's transportation department to start the process for a railroad quiet zone at the 10th Street/Singer Hill crossing. This would require closing the left-hand turns in and out of Dutch Brothers and installing medians to block drivers from crossing double-yellow lines in attempting to beat the trains after the crossing arms have lowered.

Underwood said that the developer is experienced and is looking forward to working with citizens during a public charrette required by the sale agreement to help design the building.

"The commission recognized that this site is a gateway into the city, so it has to be done right," Underwood said.